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Tesla's target price (NASDAQ: TSLA) was raised to US$1,200 from US$650 by Jefferies recently, which may have resulted in a ~1% increase in stock price—as of this writing. Jefferies analyst Philippe Houchois made the call after concluding that the transition to EVs and renewables would accelerate because of the global pandemic.
According to Street Insider, Houchois gave TSLA a BUY rating. "Tesla is still the only legacy-free OEM engaged in a +ve EV sum game. Against expectations even a few months back, the gap with peers is widening, from product to battery tech/capacity. We fear volatility may remain high but raise our DCF-based PT to $1,250 on higher mid-term growth (+2pp) and lower cost of capital (-1pp to 8%)," the Jefferies analyst explained.
Houchois' theory about the pandemic easing the transition to EVs and renewables may hold some water. With regards to renewables, some countries have actually survived with power generated from clean energy sources. For example, from March to May, renewable generated more power in the United States, reported the Energy Economics and Financial Analysis (IEEFA).
In addition, The Independent reported that Britain was coal-free for two months straight. Coincidentally, Tesla was just granted an electricity generation license in the UK, which could be an excellent opportunity for the company in the industry of renewables.
The pandemic has also made people aware of the advantages of battery electric vehicles (BEVs) and the adverse effects of internal combustion engine (ICE) cars. Stay-at-home orders allowed scientists to see how much ICE vehicles contributed to air pollution, as discussed in a previous Tesmanian report.
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This article is for informational purposes only. You should not construe any such information or other material as an investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Ma. Claribelle Deveza, Tesmanian, or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
Ma. Claribelle Deveza holds zero share of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.
About the Author
Ma. Claribelle Deveza
Longtime writer and news/book editor. Writing about Tesla allows me to contribute something good to the world, while doing something I love.